“While the company has sizably outperformed prior cycle profitability by a significant margin, we think that Activision has effectively leveraged this success into a transaction with Vivendi Games, thereby making the combined entity into a hybrid play on console gaming and online MMO gaming (via subscriptions). While this new large cap growth story (once the deal closes in early July) has already been garnering investor attention in recent months, we think that quite a few investors have yet to fully appreciate the Activision story as well as its product positioning.” – Deutsche Bank analyst Jeetil Patel

“We continue to believe that, despite healthy industry growth, the interactive entertainment software industry remains structurally challenged as a doubling in development costs cycle-to-cycle (offset by 25% higher ASPs) is forcing publishers to produce ~40%-60% higher unit volumes per title to maintain breakeven profits (or prior-cycle profits).” – Deutsche Bank analyst Jeetil Patel